The Dynamics of Asian Financial Integration
Facts and Analytics
Edited by Michael Devereux, Philip R Lane, Cyn-Young Park, Shang-Jin Wei
Routledge – 2010 – 328 pages
The ongoing global financial crisis has manifested a remarkable degree of global financial integration—and its implications—for emerging Asian financial markets. The current crisis will not and should not deter the progress that the region has made toward financial openness and integration. However, events like this clearly demonstrate that financial liberalization and integration is not without risks.
Hence, emerging Asian economies' growing financial ties have motivated us to look closer at the repercussions of increased financial integration and evaluate the benefits of risk sharing and better access to international capital markets against the costs of cross-border financial contagion. The crisis also presents a timely opportunity for the region’s policy makers to rethink their strategies for financial deregulation and liberalization and to reconsider a next step to integrate emerging East Asia’s financial markets further. However, doing so requires deeper understanding of financial market integration. While much has been said in both academic and policy circles about financial globalization and regional financial integration as separate areas of study, existing research has been relatively silent on the dynamics between these two distinctive forces.
The book addresses this gap in financial literature and assesses financial integration in emerging East Asia at both regional and global levels. The publication studies the factors driving the progress of regional financial integration in relation to financial globalization and identifies the relevant policy challenges facing emerging market economies in the region. Chapters look into three broad aspects of regional and global financial market integration: (i) measurement of regional and global financial integration, (ii) understanding dynamics of regional financial integration versus global financial integration, and (iii) welfare implications from regional financial market integration amid financial globalization. Against this context, academics, policy makers, and other readers will appreciate the rigorous research contribution provided by the book.
Executive Summary and Overview, Michael B. Devereux, Philip R. Lane, Cyn-Young Park and Shang-Jin Wei, Regional and Global Financial Integration: An Analytical Framework, Philippe Martin, International Capital Mobility of East Asian Economies: Is Domestic Investment Financed by Regional or Global Saving?, Soyoung Kim, Sunhyun Henry Kim and Cyn-Young Park, TheEvolution of Regional and Global Risk Sharing of East Asian Economies, Pierfederico Asdrubali and Soyoung Kim, Regional and Global Drivers of the Portfolio Holdings of Asian Investors, Philip R. Lane, Regional and Global Short-Term Financial Market Integration in Asia: Evidence from the Interbank Markets under the Crises, Shin-ichi Fukuda, Stock Market Integration and Financial Contagion, Kee-Hong Bae, Stock Market Integration: Emerging East Asia's Experience, Marthe Hinojales and Cyn-Young Park, Global and Regional Financial Accelerator Integration, Woon Gyu Choi and David Cook, Financial Contagion and Vulnerability of Asian Financial Markets, Michael B. Devereux and James Yetman, Not All Financial Integration is Created Equal: The Composition Matters, Shang-Jin Wei, What Happened to the East Asian Business Cycle, Jean M. Imbs, Conclusion